Bush’s New Plan for Sweeping Regulatory Reform…

is a brilliant, timely and practical answer to the financial crisis we find ourselves in today. Ready for swift action, the Treasury Secretary has promised immediate relief to homeowners and accountability for predatory lenders and other bad actors.

HAHAHAHAHAHAHA.

April Fool’s, darlings. No, Bush’s plan, even if it were structured to be effective, would not be put into place until…

Paulson proposed the broadest restructuring of federal regulatory institutions in 75 years with a call to merge agencies and redraw lines of authority that in some cases go back to the Great Depression. But the plan would put off for years any attempt to create new regulations for the streamlined system to enforce. [emphasis added]

As a result, even if the new structure were eventually adopted, it would do little to prevent a repeat of the current crisis or something similar, the Treasury secretary acknowledged.

Well, then, what would be the point of this legislation? C’mon, I’ll give you three guesses, and the first two don’t count.

First, the core of the plan was devised more than a year ago to reflect Paulson’s — and the president’s — conviction that the U.S. must lighten regulations on its financial industry or risk losing business to foreign financial centers such as London and Hong Kong.

But the proposal is being unveiled after the sub-prime mess, the housing meltdown and sliding financial markets left tens of millions of people poorer and more pessimistic.

It is also subject to the judgment of a Democratic-controlled Congress in no mood to give financial firms more leeway.

“We must restore the trust and confidence of investors and consumers,” Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) said in a statement. “That trust has been shattered — not because regulators did too much, but because they did too little.”

Here’s my favorite thing about the Bushies and their ilk: They’re so freaking predictable. Just put everything they propose through a Bush-to-English dictionary, and it will come out thusly:

3 responses to “Bush’s New Plan for Sweeping Regulatory Reform…”

The simplest reason not to support this new plan is that it came from the Bush administration. That spells trouble for the consumer and protection for the lenders.

Why are we in a crisis? Existing laws and regulations have been broken. That’s why this is a scandal. There is no reason for a lender to go upside down after foreclosing a house. Only new mortgages have little or no equity. Any mortgage that is at least five years old will have seen significant appreciation in real estate value. The lender gets to keep all payments that have been made, all applicable interest and still can be made whole with whatever is left in the real value of the home. Not to mention that the lion’s share of the interest is paid on the front end of a loan. The reason it may not add up has to do with inflated appraisals, part of the scandal.

I’m sorry, but I can’t go along with the “kick ’em when they’re down” school of lending. Obviously, people with poor credit are the ones who are the hurt the most by late fees, higher APR’s, adjustable rates and balloon payments. It just doesn’t make sense to me to charge struggling people higher interest rates. The security is in the home. That should be enough. It may well turn out that sub-prime lenders have colluded with real estate agents to sell homes at higher prices than the market would normally allow.

Before we allow Bush to consolidate all regulatory powers into one agency, which could be conveniently controlled in the future through appointments and political cronyism, we must draw back and let smarter, more ethical minds make proposals. More likely than not, Bush’ proposed regulations would lead to increased sharing of personal information among lenders.

If I remember correctly, Ted Kennedy tried to cap legally allowable interest rates on credit cards some twenty years ago. He might as well have been trying to legalize marijuana. The idea was a non-starter. Yet, if he had succeeded, all boats would have been lifted by the rising tide. Most of the families that are struggling to meet their mortgage payments also bear unreasonable credit card balances at high interest rates. The payments on much smaller balances can approach the mortgage payments themselves. And the balances on these accounts can persist for decades, effectively quadrupling the loan repayment, because principal reduction is so very slow. That was really a great regulation to require doubling minimum payments a couple of years back. Talk about a small step in the right direction. The truth is no politician since Ted Kennedy has realistically given even one pin about the American consumer. They’ve all just given up. It’s like Bruce Hornsby said, “But don’t you believe them.”

It’s time to throw Bush out on his ear and never again take anything that he says to be even worthy of consideration.